January 26, 2004

By Samantha Enslin

Durban - Contrary to popular belief, property prices in KwaZulu-Natal are streaking ahead of Cape Town and Johannesburg.

According to banking group Absa, last year property prices in KwaZulu-Natal rose 36.5 percent compared with a 16.8 percent rise in Johannesburg and a 16.3 percent rise in Cape Town.

The sharper increase in KwaZulu-Natal can be partly attributed to the fact that the province is playing catch-up with other regions that have already been experiencing a property boom.

In 2002, property prices in KwaZulu-Natal rose 13.3 percent, Johannesburg prices rose 19.2 percent and in Cape Town 12 percent.

Jacques du Toit, a property economist at Absa, said lower interest rates, more disposable income, tax cuts, lower transfer duties and the relatively poor performance of other investments have all fuelled demand for property.

And property prices on the Durban beachfront appear poised to appreciate further in value this year as new developments in the area boost the Golden Miles' profile.

Pam Golding Properties said: "Coming off a fairly low base, prices have appreciated by about 80 percent over the past year. This trend is expected to continue."

The Point, a historically significant but rundown area, is being rejuvenated by up-market residential and commercial developments, which is pushing up property prices along the whole Durban waterfront.

The city's waterfront includes the beachfront, with hotel and residential buildings overlooking the city's beaches, the Esplanade or Victoria Embankment, a palm-lined double carriage running alongside the harbour with Art Deco office and residential blocks, and the Point, where among other things the uShaka Marine World is being developed. 

Dina Soukop, a Pam Golding Properties franchise owner, said the renewal along the waterfront was first driven by the Suncoast Casino and uShaka Marine World, which will include a relocated aquarium and a water theme park.

"The development at the Point, where residential property is selling for well over R1 million, has spilled on to the beachfront and Victoria Embankment and will continue to push prices up," Soukop said.

Mike Shannon, along with partners Alan Burke and S'bu Ncube are renovating 27 historical Victorian row houses in the area that are expected to sell for about R5 million each. The houses will each have underground parking for two vehicles and a swimming pool.

They are also developing a 7 000m2 hotel and a combination office and residential apartment block, half of which have already been sold off plan. These developments are due to be complete by the end of next year.

The rise in property prices in the area has also been accompanied by growth across the province, with several areas experiencing rises of 50 percent in the last year.

Coastal properties continue to be popular, with interest in new south coast developments pushing prices up by between 50 percent and 80 percent.

But in areas such as the Berea, which has already seen strong growth in the last two years, price increases this year are expected to be moderate, rising between 10 percent and 20 percent.